The Special Investigating Unit (SIU) has recovered R2 billion in overpayments made to universities and technical and vocational education colleges (TVET) on behalf of the National Student Financial Aid Scheme (NSFAS).
This was revealed when the SIU briefed the Higher Education Portfolio Committee on its investigations into the NSFAS and the broader post-school education and training sector.
SIU’s forensic accountant Lucas Letshela said their investigation at NSFAS looked into overpayments that were more or less than the supposed allocation to institutions, among other things.
Letshela said there were discrepancies between the advance payment made and remittance advices.
“The remittance advice ideally is supposed to contain all the students that have been approved for funding by NSFAS,” he said.
Letshela also said there were also cases of students funded by NSFAS and other third parties as well as students that never attended an institution but the institution received an allocation for the affected student.
“Where NSFAS did not reconcile timeously, they would overpay a certain student.”
There were also qualifying students at the institutions, but they did not appear on the NSFAS-funded lists.
“NSFAS doesn’t know its assets and liabilities because they don’t know how much they owe and how much is owed to them.”
Letshela blamed the state of affairs for the absence of proper reconciliation and review of student allocations, as well as the weak design of the control environment and lack of consequence management by oversight bodies.
“There needs to be a person internally to ensure this process happens timeously. There needs to be a process of finalisation of funding of students happens timeously.”
He also blamed the situation on TVET colleges’ finance departments lacking the capacity to account for the NSFAS funds they received for the students and struggling with proper financial reporting.
Forensic investigation specialist, Paul Bulawa, told the members of Parliament the situation was worsened by IT systems not talking to each other.
Bulawa said they found that NSFAS failed to design and implement controls to ensure that there is an annual reconciliation between the funds disbursed to the institutions and the allocation of those funds to the students.
“This control weakness has led to overpayments and underpayments of funds to the different institutions over the period 2017 to date,” he said, adding that NSFAS recently appointed a service provider to assist them in performing the reconciliation via a process called “close out reporting”.
The SIU investigation team is engaged with tertiary institutions regarding the close-out reports and reconciliations to determine whether there was any credit that needed to be refunded back to NSFAS or not.
Bulawa said the SIU has recovered a total of R2 058 049 347.
The universities that paid back the highest amounts are Wits with R450m, followed by the University of Free State with R438m, University of Pretoria R400m, University of Johannesburg R311m, and University of Fort Hare R277m.
Only Boland College was paid back an amount of R8.9m, while R14m owed by NSFAS to Goldfields and Flavius Maleka colleges was awaiting concurrence.
Bulawa also revealed that the NSFAS had found that it allocated funds to 40 000 undeserving students after not following stringent criteria with some students making misrepresentation during their application.
“Some students took chances and through our investigation, we find this person has both parents,” he said.
Additionally, Bulawa stated that R5.1 billion was owed to the entity as a result of 40 044 students being identified by NSFAS as not eligible for assistance.
The signed acknowledgement of debt by the students was valued at R149m that was being paid in monthly instalments.
“We need to go back on whether all the people have been included in the 40 000,” he said, adding that they still need to interview students and their parents as some refuse to sign the acknowledgement of debt.
The SIU has to date interviewed only 9 534 non-qualifying students.
mayibongwe.maqhina@inl.co.za